by Douglas R. Chamberlain

Employers got a reprieve in 2014 on a key mandate incorporated in the Affordable Care Act (ACA), but the new effective date for many employers is now set for January 1, 2015.

The ACA generally provides that all employers with 50 or more employees who work 30 or more hours per week must offer their employees health insurance coverage. This “employer mandate” was originally slated to take effect January 1, 2014, but during 2013, the Obama administration delayed the effective date to 2015.

Later, the administration directed the IRS to issue final regulations further delaying the employer mandate to 2016 for employers with more than 50 but fewer than 100 employees. The regulations also ease compliance for larger employers that remain subject to the mandate beginning in 2015.

Under the original ACA requirements, employers subject to the mandate would be noncompliant unless at least 95 percent of their employees working 30 or more hours per week were offered coverage. For 2015 only, the final regulations provide that covered employers need offer coverage to only 70 percent or more of their full-time employees. The Treasury Department stated that the one year of transition relief should help employers that, for example, currently offer coverage to employees working 35 or more hours a week but not to those working 30 to 34 hours.

The transition rule gives larger employers additional time to offer coverage to at least 95 percent of their full-time employees, the original requirement that will apply to all employers subject to the mandate beginning in 2016.

It should be emphasized that the transition rule applies only to employers with 100 or more full-time employees because employers with 51 to 99 employees are fully exempt from the mandate in 2015, while those with 50 or fewer employees are permanently exempt.

Douglas R. Chamberlain is an attorney with Sulloway & Hollis, P.L.L.C., in Concord, New Hampshire. He can be reached at dchamberlain@sulloway.com.